ASEAN KEY DESTINATIONS
Cambodia, Laos share regional growth
Other than the special economic case of Myanmar, Cambodia and Laos are two underdeveloped countries that rest at the bottom of the Asean economic ladder.
However, with the arrival of 2011 the economies of these two countries are progressing. In Cambodia, although investments approved by the government declined a steep 54 percent in 2010, other economic factors weighed in to show continued growth. Foreign direct investment (FDI) in the first nine months of 2010 exceeded all of 2009. In 2009, foreign pledged investment accounted for around $2.10 billion dollars, compared to $2.29 billion in 2010. The Asian Development Bank said it was important to account for large single investments, observing that a multi-billion dollar island development project approved in 2009 had distorted the figures.
In Laos, the country’s first stock market began operation on Tuesday, with two state owned and/or controlled firms the only stocks on the market.
Ruled by a communist government (the Pathet Lao) since 1975, Laos began market reforms in the 1980s, and now aims to integrate with the global economy and join the World Trade Organization. The country’s 7 million people, 40 percent under 15 years old, average earnings of $2.60, according to statistics from the Association of Southeast Asian Nations. Many seek employment in neighboring Thailand to earn a better living.
Copper and gold mining, hydropower and tourism are the biggest sources of income in a country where most people survive on subsistence farming, according to government data.
Vathana Dalaloy, the acting secretary general of Laos’s Securities and Exchange Commission, said private companies and state-run enterprises may raise at least $8 billion in equity and bond sales in the next five years. About $15 billion will be needed to fund government and private sector investments by 2015, she said.
Both countries may benefit from the most prosperous economy in the region, Thailand, which may seek to locate environmentally sensitive industrial operations in Laos and Cambodia.
In 2010, residents surrounding the Map Ta Phut industrial development in Thailand stopped operations of about 70 plants in the industrial estate. Thai courts upheld the residents’ case that the plants skirted the law by not following environmental procedures when the plants were established, thus causing health and safety concerns in the residential communities surrounding the industrial park. This resulted in suspension of activities at the plants for a number of months. Most returned to production once they showed compliance with environmental regulations.
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